Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy for raising once again the important matter of insolvency and how it impacts on the rights of workers, creditors and others at this time. The procedures for liquidations are set out in the Part 11 of the Companies Act 2014. In general terms, a company is permitted to initiate a winding-up where it has complied with the requirements of the Companies Act 2014. A company both during normal operation and in a winding-up process must of course also abide by all relevant legal requirements, including the treatment of employees and creditors and disclosure to the Revenue Commissioners as well. However, the provisions of the Companies Act 2014 provide safeguards to prevent the abuse of the liquidation system. These include preferential payments under section 621 which provide for categories of employee entitlement such as wages owed, holiday remuneration, superannuation benefits, ill health payments and social welfare contributions. An insolvent company is defined by the Companies Act 2014 in section 818 as a company that is unable to pay its debts and is further defined in the Act.

Therefore insolvency cannot merely be asserted: insolvency is defined in the legislation and scrutinised in the courts. In addition the liquidator of an insolvent company must report to the Office of the Director of Corporate Enforcement, ODCE, on its demise and must apply to the High Court for the restriction of each of the directors of the company, unless they are relieved of that obligation by the ODCE. Ireland has a longstanding preventative restructuring framework in examinership that provides a protective mechanism for companies that have real prospects for the future but find themselves in financial difficulty at a point in time. When it comes to workers the Protection of Employment Act 1977 imposes obligations on employers who are proposing collective redundancies, including official notification to the relevant Minister and a 30-day consultation period to allow employee representatives adequate opportunity to consider the employer's proposals and make constructive proposals in response. While this legislation is currently the responsibility of my colleague the Minister for Employment Affairs and Social Protection, Deputy Humphreys, it will shortly transfer to my Department under a transfer order.

On redundancy entitlements, it is the responsibility of the employer in the first instance to pay statutory redundancy and all other wage-related entitlements to eligible employees.

Additional information not given on the floor of the House.

However, the social insurance fund, under the Department of Employment Affairs and Social Protection provides a safety net for employees in situations where the employer cannot pay due to financial difficulties or insolvency.

The Government has committed in the programme for Government to reviewing whether the current legal provisions surrounding collective redundancies and the liquidation of companies protect the rights of workers effectively. It has committed also to reviewing the Companies Act 2014 with a view to addressing the practice of trading entities splitting their operations between trading and property with the result being the trading business, including the jobs, go into insolvency and the assets are taken out of the original business. Additionally, it commits to examining the legal provision that pertains to any sale to a connected party following the insolvency of a company including who can object and the allowable grounds of an objection.

As part of its next work programme, I will be requesting the Company Law Review Group to examine these programme for Government commitments.

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